A Step-by-Step Guide to Setting Up a Recurring Deposit Account for Beginners

Saving money is an essential aspect of financial planning, even though about 50% of Indians save just 0 to 20% of their income. Recurring deposits (RDs) are a great way to achieve your savings goals. If you're new to the concept of RD and want to learn how to set up recurring deposits, you've come to the right place. In this beginner's guide, we will break down the process of setting up an RD account, making it easy for you to get started on your savings journey.

How to Set up Recurring Deposits for Beginners Online

It might sound complicated, but the RD account opening is far from that. Below is the step-by-step guide on how to set up recurring deposits for beginners.

Step 1: Research and Compare Interest Rates

Before opening an RD, it's important to research and compare the interest rates offered by different banks. Different banks offer different interest rates, so it's essential to choose the bank that provides the best rate. For example, Ujjivan SFB offers high-interest RDs through which you can earn up to 8.05%* per annum with additional 0.50% interest rate for senior citizens (*T&C apply). Booking a high-interest RD can help you maximise your savings.

For the next steps, we have considered Ujjivan SFB’s Recurring Deposit Account opening process.

Step 2: Visit the Bank's Website

Visit Ujjivan Small Finance Bank’s official website and go to deposits. Select Recurring Deposit. You will get all the information pertaining to Ujjivan SFB Recurring Deposit including, interest rate, tenure, pre-closure penalty charges, etc.

Step 3: Fill out the Application Form (for New Customer)

If you’re a new customer, you need to fill out the RD application form. Once done, submit the details. As next steps, the bank will guide you on how to open an RD. Alternatively, you can visit your closest Ujjivan Small Finance Bank branch and open an RD. The bank executives will guide you through the entire account opening journey. You can check your closest Ujjivan branch here. 

Step 4: Use Internet or Mobile Banking (for Existing Customer)

In case you already have a bank account with Ujjivan, use Internet Banking or Mobile Banking app to open the account. 

Using Mobile Banking to Open Recurring Deposit

Let’s say you are an existing customer who wants to open an RD. You can download the mobile banking app. Choose your preferred language – you have the option to select from 8 vernacular languages and English – and enter your 4-digit MPIN.

Once done, select ‘Deposits’ from the home screen. Now select ‘Debit Account’ (your linked Ujjivan SFB Savings Account). Enter the amount, select the Type of Deposit as ‘Recurring deposit’, choose the next RD due date as per your preference, select tenure (6 months to 10 years). You have the option to add a nominee, which is highly recommended in case if something unfortunate happens to you. In such situations, the nominee becomes the custodian of your RD. 

Once done, click ‘Continue’. You will eb able to see your RD details along with the interest rate and maturity amount. Click ‘Submit’ to activate your Ujjivan Recurring Deposit Account. 

Since you have already selected the linked ‘Debit Account’, your RD amount would automatically get deducted from the Savings Account on the due date.

Things to Consider When Opening a Recurring Deposit Account

Before opening a recurring deposit account, there are a few things you should keep in mind:

• Interest Rate: Check the interest rate offered by different banks for different types of recurring deposit accounts. The interest rate may vary based on factors like tenure and the amount deposited. 
• Tenure options: Choose the tenure that best suits your savings goals. Staying invested for the long-term would fetch you higher returns.
• Withdrawal Policy: Premature closure of RD before 6 months may attract a penalty of 1% on the interest rate as applicable at the time of withdrawal. 

Which Bank Offers the Best Recurring Deposit?

Ujjivan Small Finance Bank offers high-interest Recurring Deposit designed to meet your short- and long-term goals. The account opening process is extremely simple. As an alternative, you also have the option to visit any of the bank branches and open an RD. The bank executives would guide you through the account opening process – end-to-end, no questions asked.